Health Minister says visit to the new Royal Hospital integral to government intervention on development
Patients across Merseyside are set to benefit from a brand-new, state-of-the-art hospital after the Government backed the local Trust’s proposal to end the current PFI deal and complete construction work on the hospital with public sector funding.
Construction work had begun on the new hospital, part of The Royal Liverpool and Broadgreen University Hospitals Trust NHS Trust, under the PFI deal. However work was halted when the firm carrying out the work, Carillion, went into liquidation earlier this year. Since then, the Trust and Government have worked closely together to find a solution which puts patients first.
Despite very constructive engagement from the lenders who have funded the project to date, they have concluded they will be unable to complete and operate the hospital under the original terms.
The Government has now backed the Trust’s proposal to end the current PFI deal, and complete construction work within the public sector as quickly as possible, and open the hospital to patients in 2020.
Health Minister, Steve Barclay said:
“When I visited the new Royal Liverpool hospital in May, I made clear the Government’s commitment to ensuring the construction of this state-of-the-art hospital was finished. I am pleased to today confirm that the Government will step in and publicly fund the remaining work so that the hospital is completed, as it has also done with the Midland Metropolitan Hospital in Birmingham.
“It is a central purpose of PFI that construction risk sits with the funders. This has also been at the heart of the time it has taken since January when Carillion went into liquidation, as the lenders commissioned detailed expert assessments of the previous construction work.
“The Trust’s Board agreed yesterday that the PFI agreement should be terminated after the 30 September 2018, which under the contract, is the latest acceptable date for the hospital to be completed. The Government has made clear it supports the Trust’s decision.”
When completed, the new Royal Liverpool University Hospital will have 646 beds on 23 wards including a state-of-the-art critical care unit and a large clinical research facility. It will have 18 operating theatres and the emergency department will be one of the biggest in the North West.
Aidan Kehoe, Chief Executive at Royal Liverpool and Broadgreen University Hospitals, said:
“We welcome the statement from Health Minister Steve Barclay. We would like to thank our government colleagues, The Hospital Company and funders EIB and Legal and General, for all their hard work over the last nine months. We have all strived to maintain the existing project agreement, but it has become clear to us that this will no longer be possible. Our Board has now agreed that the existing project agreement should be terminated, and that the Trust should complete the project.
“The Trust intends to continue working with the existing construction contractors involved, so that the construction finishes as soon as possible, maximising the value for money of the taxpayers’ investment in the hospital
“We would also like to thank all those locally who have supported us throughout this challenging period, including local politicians, in particular our local MP Louise Ellman, our staff, and our patients.”
Chancellor of the Duchy of Lancaster, and Minister for the Cabinet Office, David Lidington said:
"Following detailed negotiations, the Government is pleased to announce progress in the development of this hospital for the people of Merseyside.
“Since Carillion's insolvency, our approach has ensured the continuation of public services and safeguarded over 13,000 jobs."